HAQQ Network Expanding Islamic Web3 Initiative With Gold Token and RWA” has taken a significant leap forward with the launch of its Gold Token in June, marking a critical advancement in the network’s broader ambition of tokenizing real-world assets (RWA). In a detailed blog post, Alex Malkov, the co-founder and CEO of HAQQ Network, highlighted the dual role of the Gold Token—not only as a stable store of value but as a pivotal element in the Islamic Interbank Market.

Tokenized commodities like the Gold Token promise a more streamlined and transparent approach than traditional asset exchanges. The Gold Token is not just a digital asset but is directly exchangeable for physical gold. HAQQ plans to expand this concept to include other investment commodities and potential securities.

Furthering its innovative strides, HAQQ Network also intends to tokenize Islamic financial products such as Sukuk, transforming them into blockchain-based tokens. This transformation enhances liquidity, accessibility, and efficiency, allowing for fractional ownership and broader distribution. Importantly, these tokens adhere to Shariah law, integrating compliance rules within the token’s smart contracts to ensure religious adherence.

Expanding its offerings, HAQQ has recently introduced VISA cards denominated in its ISLM token, explicitly targeted at EU residents. This development represents a significant stride toward bridging Islamic digital assets with mainstream financial services, offering EU users a platform to manage their finances according to Islamic principles.

Last year, the Islamic Coin project under HAQQ Network saw an impressive launch, garnering extensive coverage from leading crypto publications globally and major fintech outlets in the Middle East. The project built a robust community of over 1.5 million members and was backed by an advisory board that includes members from the UAE’s ruling families. The ISLM token raised substantial funds through private sales and secured investments, totalling over $400 million.

However, despite its successful launch and substantial technological foundation, Islamic Coin faced hurdles, including regulatory scrutiny and media misinformation. The Virtual Asset Regulatory Authority (VARA) initiated an investigation, but HAQQ Network cooperated fully, leading to the closure of the investigation without any enforcement actions.

Alex Malkov acknowledged the challenges posed by the VARA investigation but reiterated their commitment to transparency and combating misinformation and Islamophobia. This stance aims to foster a more inclusive and equitable financial ecosystem. Despite setbacks, Islamic Coin is now listed on major centralized exchanges such as KuCoin, LBank, XT, and MEXC and decentralized platforms like SushiSwap, Osmosis, and Uniswap. This has significantly boosted the token’s liquidity and visibility.

Moreover, HAQQ has launched a non-custodial wallet available on the Apple Store and Google Play, designed to attract non-crypto users with features like social login and device recovery. This wallet is trendy in regions such as Nigeria, Indonesia, and Turkey, providing secure asset management without intermediaries.

A noteworthy wallet feature of the “HAQQ Network Expanding Islamic Web3 Initiative With Gold Token and RWA” is staking, where ISLM holders can earn rewards while enhancing the network’s security and governance. Additionally, they can participate in ‘halal yield’ through liquidity pools on decentralized exchanges, adhering to Islamic financial principles and enabling Muslim investors to engage in the digital economy without compromising their religious values.

HAQQ Network’s dedication to merging Islamic finance with cutting-edge Web3 technology demonstrates its potential to influence the financial landscape significantly, adhering strictly to Islamic ethical standards

At the 3rd Tashkent Investment Forum, the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan took a significant step forward in their partnership to empower small and medium-sized enterprises (SMEs) and foster economic growth in Uzbekistan. The forum, held in the capital city of Uzbekistan, brought together key stakeholders from the public and private sectors to discuss investment opportunities and economic development strategies for the region. The collaboration between the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan is aimed at boosting the private sector in Uzbekistan.

During the forum, ICD and JSC Ziraat Bank Uzbekistan formalized an expression of intent to collaborate on various initiatives aimed at supporting SMEs. One of the key elements of this collaboration is the provision of a Line of Financing (LoF) facility by ICD to JSC Ziraat Bank Uzbekistan. This LoF facility will enable the bank to fund private sector projects as an agent of ICD, thereby providing SMEs with access to the necessary capital to initiate and grow their businesses.

The partnership between ICD and JSC Ziraat Bank Uzbekistan is expected to have a significant impact on the SME landscape in Uzbekistan. By equipping entrepreneurs with the resources they need to succeed, this collaboration will not only support the growth of individual businesses but also contribute to the overall economic development of the country. SMEs play a crucial role in driving economic growth, creating jobs, and fostering innovation, and this partnership will help strengthen the SME ecosystem in Uzbekistan.

JSC Ziraat Bank Uzbekistan, as a strategic partner for ICD, brings a wealth of experience and expertise to the table. As a prominent commercial bank with foreign capital, JSC Ziraat Bank Uzbekistan has a strong track record of supporting SMEs and promoting economic development. The bank’s partnership with ICD further underscores its commitment to advancing the private sector in Uzbekistan and its dedication to supporting the country’s economic growth.

ICD, for its part, is a leading multilateral development financial institution that focuses on supporting the economic development of its member countries through the provision of finance and advisory services to private sector enterprises. By partnering with JSC Ziraat Bank Uzbekistan, ICD is furthering its mission of promoting economic development and fostering entrepreneurship in Uzbekistan and across the Islamic world.

The LoF facility provided by ICD to JSC Ziraat Bank Uzbekistan is just one example of the many initiatives that the two entities are undertaking to support SMEs in Uzbekistan. In addition to providing financial support, the partnership between ICD and JSC Ziraat Bank Uzbekistan will also include capacity-building initiatives and technical assistance programs to help SMEs succeed in today’s competitive business environment.

Overall, the partnership between ICD and JSC Ziraat Bank Uzbekistan represents a significant step forward in supporting SMEs and fostering economic growth in Uzbekistan. By working together, these two institutions are helping to create a more vibrant and dynamic private sector in Uzbekistan, which will ultimately benefit the country’s economy and its people. The collaboration between the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan is expected to have a far-reaching impact on the private sector in Uzbekistan.

By Hafiz M. Ahmed

In recent years, the concept of microtakaful has emerged as a significant development in Islamic finance, offering a Shariah-compliant insurance solution tailored to the needs of the less affluent segments of society. This form of microinsurance is designed not only to adhere to Islamic principles but also to provide financial protection to those typically underserved by conventional insurance systems. This blog post will explore what microtakaful is, how it operates, and its impact on communities.

What is Microtakaful?

Microtakaful is a form of Islamic microinsurance that offers Shariah-compliant insurance solutions to low-income individuals and communities. This system operates on the principles of mutual assistance and risk sharing, where participants contribute small premiums to a collective pool. The funds are managed according to Islamic law, ensuring no investment in prohibited activities, and profits and risks are shared among all participants.

Difference between Takaful and Microtakaful

Takaful and microtakaful are both forms of Islamic insurance, but they cater to different segments of the market and have distinct operational scales and objectives. Here are the key differences between the two:

1. Target Audience:
   • Takaful is geared towards a broader audience, including businesses, middle to high-income individuals, and larger entities seeking Shariah-compliant insurance solutions.
   • Microtakaful specifically targets low-income individuals and communities, offering them affordable insurance coverage to help mitigate financial risks associated with accidents, health issues, and other unforeseen events.
2. Scale and Scope of Coverage:
   • Takaful policies generally cover a wide range of risks and can offer substantial coverage amounts, similar in scope and scale to conventional insurance policies.
   • Microtakaful provides smaller, more limited coverage aimed at essential needs, reflecting the lower premium capacity of its clientele. The focus is on accessibility and essential protection rather than comprehensive coverage.
3. Premiums and Contributions:
   • Takaful involves higher premiums reflecting the broader and more significant coverage it offers, and these premiums are also used to invest in permissible (halal) ventures according to Islamic law.
   • Microtakaful requires very small, affordable premiums to ensure that the financially weaker sections of society can also access insurance. These contributions are pooled to cover the collective risk of the group.
4. Objective and Impact:
   • Takaful aims to provide a Shariah-compliant alternative to conventional insurance, ensuring participants avoid Riba (interest), Gharar (excessive uncertainty), and Maysir (gambling).
   • Microtakaful not only aims to be Shariah-compliant but also focuses on social impact by enhancing financial inclusion and providing safety nets to economically vulnerable groups.

How Does Microtakaful Work?

The operational model of microtakaful is fundamentally different from conventional insurance. Here’s a step-by-step breakdown of its mechanism:

1. Risk Pooling: Participants contribute small, affordable premiums into a collective pool, which is used to cover potential losses or damages. These contributions are considered donations and thus embody the Islamic principle of charitable giving and mutual assistance.
2. Takaful Operator: A takaful operator manages the pool. The operator is responsible for ensuring that the fund is used properly, adhering to Shariah principles, and overseeing claims and compensation. Importantly, unlike conventional insurance, the operator does not own the fund but acts as a custodian or manager.
3. Shariah Compliance: The operations of microtakaful are governed by a Shariah board, which ensures that all transactions remain free from interest (riba), uncertainty (gharar), and gambling (maysir). Investments made with the pooled funds must be in halal (permissible) ventures, avoiding industries like alcohol, gambling, and tobacco.
4. Surplus and Deficit Handling: Any surplus in the takaful fund (after claims and expenses) can be distributed to the participants as dividends or reinvested to increase the fund’s capacity. In the case of a deficit, the takaful operator may provide an interest-free loan (qard hasan) to the pool to cover the shortfall, which is subsequently repaid.
5. Claims and Compensation: When a claim is made, compensation is paid out from the collective pool. The focus is on solidarity and support among the members rather than on profit-making.

Benefits of Microtakaful

Microtakaful has several advantages, particularly for low-income communities:

• Accessibility: It provides financial security to those who may not afford or access traditional insurance products.
• Community Empowerment: By promoting mutual assistance, microtakaful strengthens community ties and resilience.
• Economic Stability: It helps stabilize the economic conditions of individuals and small businesses by mitigating risks and providing support in times of need.

Challenges and Future Prospects

Despite its benefits, microtakaful faces challenges such as low awareness, regulatory hurdles, and the need for more tailored products to meet diverse needs. However, the potential for growth is significant, especially in countries with large underserved Muslim populations. As awareness and understanding of microtakaful increase, it is expected to play a more prominent role in global Islamic financial services.

In conclusion, microtakaful represents a pioneering approach to financial inclusion, blending traditional Islamic principles with innovative risk-sharing mechanisms to protect the most vulnerable. Its expansion can lead to more equitable access to insurance and contribute to the broader economic empowerment of disadvantaged communities worldwide.